How To Protect Yourself From Identity Theft - Thwart The Bad Actors

In this episode of Friends Talk Financial Planning, we talk about how to protect yourself from identity theft, which continues to be a serious issue. One of the key strategies we recommend is setting up online accounts with the IRS and the Social Security Administration—even if you don't currently need them—so that scammers can't create accounts in you name. These accounts can be secured through ID.me, and it's a good idea to set them up not only for yourselves but also for your children or grandchildren.

We also revisit some classic, low-cost methods of protection, like regularly checking credit card and bank statements to catch any suspicious charges. As fraud shifts more toward bank accounts, it’s especially important to stay alert. We talk about freezing credit as another effective way to prevent unauthorized accounts from being opened in our names. Freezing and unfreezing credit is now free and easy, and we recommend doing this for your kids as well.

A newer risk we highlight is medical identity theft. Scammers have started using stolen health insurance information to get treatment or medication under someone else’s name, which can lead to inaccurate medical records or problems when you apply for insurance in the future.

We also remind our viewers to be cautious with emails—especially around tax season—and to avoid clicking on links from unknown senders. Finally, we encourage helping others in vulnerable situations, like those who are sick or overwhelmed, to take these protective steps too. Together, these actions can help us all stay a little safer from identity theft.

Resources:

- Alliance of Comprehensive Planners: https://www.acplanners.org

- John's firm website: https://www.trinfin.com

-Find us on Facebook: www.facebook.com/friendstalkfinancialplanning

#ACPMemberWisdom #identitytheft #identitytheftprotection #identitytheftprevention 

TRANSCRIPT:

John: Identity theft continues to be a big problem for many people. On today's episode of Friends Talk Financial Planning, we're going to talk about steps that you can take to protect yourself from the bad guys. Hi, I'm John Scherer, and I run a fee-only financial planning practice in Middleton, Wisconsin.

Bridget: And I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois. And before we start talking about the recent scams, please subscribe. It helps other people find us on YouTube. So, John, let's talk about the most recent scams that we've seen and that we're hearing about, and, of course, how to prevent them. It seems like the old favorites are still there, but that there's specific vulnerability because people are concerned about the information that the government has about us. Talk about what you found about protecting yourself.

John: Yeah, the old classics still play well. Some things haven't changed, but there are some things that have changed. And one of the things that we've been hearing about is people having problems with online access to the IRS and to Social Security, where bad actors come in and set up an account in your name, and now they control access to your records. And that can cause all kinds of problems. And so, what we recommend to people is to set up, even if there's no need, an online account at the IRS or an online account at Social Security.

We recommend setting up accounts in those places just as a kind of protective moat, just to keep the bad actors out, not necessarily because anybody needs to use those at any given point in time. There're a lot of people that don't. I didn't have an SSA account, Social Security Administration. I learned about that and thought, “Man, I better just make sure that I'm the right John Scherer, so nobody else can be.” It's hard enough sometimes. It can be a hassle setting up these accounts. Can you imagine if somebody else has set up an account in my name? Now I'm going to prove to them that I'm the real deal. That's one of the big things. And the government uses a firm called ID.me.

And you can log in, you can have access to both accounts using that service, so we recommend people do that. We also recommend that you do it for your kids or grandkids as well. So I've got sons in middle school, and we've opened up accounts for them because they've got Social Security numbers. They're still subject to fraud. It doesn't make any difference. The bad guys don't care how old somebody is. So that's one of the low cost (it just takes a little bit of time to get it set up) but it could be a big benefit if you're protecting yourself from somebody having that information.

Bridget: Right. And just keep good records so you can get back in there when you want to get back in there. I also use it for my passport. I have global entry, so that all that is kind of under one roof. Yeah, I agree. I think that's great. I know I've had my Social Security account for a long time because I am kind of fascinated with going in there and looking at it.

John: I haven't paid attention to it much, but when we have to make estimated payments to for taxes, you can go on the IRS website and just pay (I can't remember the terminology) as a guest or something like that. I just want to pay the thing. I don't want to go through the account set up and blah, blah, blah. Wait a minute. Now I do want to have that account set up right there. So it is useful for some things, but it's easy to overlook that. And again, it’s low cost and, why not have that little extra layer of protection?

Bridget: Yeah, makes sense. Another idea. I’m sticking with one of our old favorites before we, go on to talk about something that neither of us had really heard about before, and that is making sure you look at your credit card and bank statements monthly, if not more. I've heard that credit, cards have gotten locked down enough so that more of the fraud is coming through banks right now. I don't know if that's true or false. That's just what I heard.

But making sure I take a look at my bank statement, making sure that I recognize all the charges. Same with my credit cards. And you know what, I have to admit, I buy a lot on Amazon, so I don't necessarily add up every Amazon charge. There could probably be a false one of those, but I look at them and see if I recognize them. I don't necessarily check my receipts to make sure it's exactly the same as my receipt, but I do a reasonableness check to see, “Okay, does anything look off here?” And within the last two years, I did find something. That was a drag.

John: In the last 20 or so years, credit card usage and debit cards, Zelle and Venmo, those sorts of things have changed. But remember, it used to be where you wouldn't even use your credit card unless it was worth a certain amount. It was sort of embarrassing to have a $5, $10, $20 transaction. If you’re buying a TV or something like this, then you'd use the credit card. And you'd get statements, and they didn't come on the Internet because there wasn't the Internet or it was just starting. It was AOL dial up sort of things. And so, when you got the statements and it comes in the mail, you’d go, “Oh, I'll probably at least take a look at it.”

Now when I can get it whenever I want to or there's an email, which is easy to click and delete. We just don't pay attention to these things the way we used to, because it's easier to not pay attention. There're some good things, like all my payments go automatically. I don't have to worry about forgetting to write the check to pay off the credit card. But at the same time, then I'm not forced to look at it like we used to. So for some of us, it's sort of changing those habits and paying attention to that stuff. Simple. I love that. Again, the old classics. It’s not fancy, but that's what helps protect you.

Bridget: Yeah, I know it's not fancy. It doesn't cost anything. It’s not glamorous, but it's a good one.

John: It’s effective.

Bridget: Another thing that you like, and you’ve got more experience with this than I do, is credit freezes.

John: Yeah. So for me, it’s IRS accounts and looking at your statements, then freezing credit. It used to be that it cost money to freeze credit and there was a giant process to get in and out. Now it's free to freeze your credit and unfreeze your credit. And if you need to have it opened up, it's usually a phone call or a quick online process, saying, “Give the car dealership access to my credit records for a couple of days.” A lot of the fraud that we see and are probably familiar with is somebody got my credit card number and charged stuff.

But the other side of it is, what if somebody opens up a new account in my name? I might not even know it. And I have heard stories like this. We haven't had clients have this situation, but somebody opens up and charges $10,000, and they make the minimum payments. What's the minimum payment? 100 bucks for a little while now. Two years from now, it shows up on my credit report that I owe $15,000 to whomever. Now try to explain to the credit card company why you didn't do that. It’s easy to dispute a charge.

Listen, I didn't pay for this, and you go to Visa or whomever it is, and they unwind it. But when you've got a whole new credit card opened in your name or a vehicle or all these sorts of things. And we do the same thing for kids, too, Bridget. I've got my credit freezes on the boys. My kids have Social Security numbers, so we encourage people to freeze their credit and for their minor kids as well. And you don't like that; you're not as big of a proponent of that, right?

Bridget: I think it's a little more complicated than maybe what it's worth. But I have a complicated name. It's kind of a weird thing to say, but the person that I knew who was getting a lot of these false credit cards had a very common name, like Joe Smith. That wasn't his name. But it was a very common name, and so it was easy to get that. And I know how it is for me, an it's hard for me to keep track of stuff, so I try to make it simpler. And I don't do this one.

John Scheer: Yeah.

Bridget: But I do keep track of my credit score. One of my credit cards tells me every month what it looks like. And so, I do look at that.

John: And that's another thing maybe to put out there is that everybody has access to a credit report. So you can get one credit report per year.

Bridget: Per place. There’re three credit reporting agencies.

John: That's right.

Bridget: You get one from each place. Yeah. So that's a great way to look at it too.

John: Right.

Bridget: Yeah. Oh, here's the new one. Neither of us had heard of this one. And that is medical insurance scams. So people get your medical card and then start going to rehab with it and you get the bill for the rehab. I'm using an extreme example. But evidently it’s on the rise. So that's another one to be more conscious of than maybe what you would have thought before.

John: Yeah. And you think about the dollars involved with something like that, but also just having something potentially on your medical record.

Bridget: Right.

John: And think about it, if somebody needs a drug that cost $1000 a month, so they use your pharmacy card and now they get it for $10 a month. Big deal. How does it affect me necessarily? But now there's some diabetes drug that's on my record, so if I go to apply for long-term care insurance or if I need to apply for health insurance or life insurance.

Bridget: Life insurance. Yeah.

John: Or it somehow gets into my record at the doctor's office. There're all kinds of things where you go, “Oh boy, that's false information on your medical record.” Theoretically, that could be deadly.” It’s those sorts of things where just being smart about that medical information was one of those things that I hadn't thought about. You start thinking about it, and that could be a real thing. And apparently it is because we've read a lot about it.

Bridget: Exactly. The alerts were about that, and they were from government agencies which really collect a lot of data and then send out alerts. So I believe it.

John: I want to bring up the other thing. When talking about the classics, when you get emails, if you don't recognize things, don't click on links. It happens. And you think those are going away, but I see them all the time. And especially around this time of year. The IRS will never send you an email. So don't click on it. It comes through, and it's scary. It looks good. But again, it’s just those basics; don't click on anything that you're not familiar with the sender.

Bridget: Well, another tip I wanted to mention is people who are especially vulnerable could be sick or just unable to deal with their finances, maybe temporarily, maybe permanently. And so, if you're helping somebody that's in that type of situation—they're sick or just not able to deal with it for a while—doing these things for them would be a help, because they're more vulnerable. I think that thieves prey on people who are in these vulnerable situations and might not be as vigilant as they usually are.

John: Yeah, that's a great point. And with that, let's wrap things up here. I'm John Scherer. I run a fee-only financial planning practice in Middleton, Wisconsin.

Bridget: I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois. John and I are both taking clients. You can find more information about that in our program description. But if you are looking for an advisor near you, we're a member of the Alliance of Comprehensive Planners. So you can check out acplanners.org to find more information.

John: And don't forget to hit that subscribe button.

At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.